• Second quarter public cloud ARR of $542 million, an increase of 31% as reported and 32% in constant currency from the prior year period⁽¹⁾
• Cloud net expansion rate of 123%
• GAAP operating margin was 15.1%, up 800 basis points year-over-year
• Non-GAAP operating margin was 22.0%, up 640 basis points year-over-year⁽²⁾
• GAAP diluted EPS was $0.38, up 124% year-over-year
• Non-GAAP diluted EPS was $0.64, up 33% year-over-year⁽²⁾

Teradata (NYSE: TDC) today announced its second quarter 2024 financial results.

“Teradata delivered another quarter of strong growth in Cloud ARR, increasing 32% in constant currency, and we maintained our robust 123% net expansion rate in the cloud,” said Steve McMillan, President and Chief Executive Officer, Teradata. “We are taking decisive action across the business to improve our execution and efficiency to reaccelerate profitable growth. The underlying fundamentals of our business are strong. In a world where analytics and AI underpin a company’s success, our hybrid cloud platform and foundation of trusted data and analytics are what they need to consistently deliver value to their business.”

Second Quarter 2024 Financial Highlights Compared to Second Quarter 2023

• Public cloud ARR increased to $542 million from $414 million, an increase of 31% as reported and 32% in constant currency⁽¹⁾
• Total ARR decreased to $1.465 billion from $1.523 billion, a decrease of 4% as reported and 3% in constant currency⁽¹⁾
• Recurring revenue was $368 million versus $371 million a decrease of 1% as reported and an increase of 2% in constant currency ⁽¹⁾
• Total revenue was $436 million versus $462 million, a decrease of 6% as reported and 3% in constant currency⁽¹⁾
• Recurring revenue was 84% of total revenue versus 80%
• GAAP gross margin was 60.8% versus 59.7%
• Non-GAAP gross margin was 62.2% versus 60.6%⁽²⁾
• GAAP operating income was $66 million versus $33 million
• Non-GAAP operating income was $96 million versus $72 million⁽²⁾
• GAAP diluted EPS was $0.38 versus $0.17 per share
• Non-GAAP diluted EPS was $0.64 versus $0.48 per share⁽²⁾
• Cash flow from operations was $43 million compared to $49 million
• Free cash flow was $39 million compared to $46 million⁽³⁾

Restructuring Action

Teradata announced that it has realigned its sales function and initiated global restructuring and cost reduction actions to optimize operations, reduce non-revenue generating expenses, and drive efficiencies for long-term growth and profitability, resulting in a reduction of approximately 9% to 10% of its global workforce that is expected to result in:

• Operating expenses reducing by approximately $75M to $80M on an annualized run rate. Teradata expects to re-invest a portion of this amount back into revenue generating growth areas.
• Total cash expenditures from severance payments of approximately $45M to $50M, of which payments in 2024 are approximately $30M to $35M. The remaining payments will be made in 2025.
• Non-GAAP operating profit to benefit by approximately $15M to $20M in 2024.

Outlook

For the third quarter of 2024:

• GAAP diluted EPS is expected to be in the range of $0.14 to $0.18 per share
• Non-GAAP diluted EPS is expected to be in the range of $0.54 to $0.58 per share⁽²⁾

For the full-year 2024, Teradata updates the following ranges:

• Public cloud ARR growth of 28% to 32% year-over-year, in constant currency⁽⁴⁾
• Total ARR in the range of -2% to -4% year-over-year, in constant currency⁽⁴⁾
• Recurring revenue in the range of flat to -2% year-over-year, in constant currency⁽⁴⁾
• Total revenue in the range of -2% to -4% year-over-year, in constant currency⁽⁴⁾
• Cash flow from operations of $290 million to $310 million
• Free cash flow of $270 million to $290 million⁽³⁾
• GAAP diluted EPS is expected to be in the range of $0.89 to $0.95 per share
• Non-GAAP diluted EPS is expected to be in the range of $2.20 to $2.26 per share⁽²⁾

Earnings Conference Call

A conference call is scheduled for today at 2:00 p.m. PT to discuss the Company’s second quarter 2024 results, 2024 outlook, and provide a business and financial update. Access to the conference call, as well as a replay of the conference call, is available on Teradata’s website at investor.teradata.com.

Supplemental Financial Information

Additional information regarding Teradata’s operating results is provided below as well as on Teradata’s website at investor.teradata.com.

Note to Investors

This release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to opinions, beliefs, and projections of expected future financial and operating performance, business trends, liquidity, and market conditions, among other things. These forward-looking statements are based upon current expectations and assumptions and often can be identified by words such as “expect,” “strive,” “looking ahead,” “outlook,” “guidance,” “forecast,” “anticipate,” “continue,” “plan,” “estimate,” “believe,” “will,” “would,” “likely,” “intend,” “potential,” or similar expressions. Forward-looking statements in this release include our 2024 third quarter and full year financial guidance and the 2024 restructuring actions and related anticipated cost savings, charges, savings reinvestment, and cash expenditures. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially, including those relating to: the global economic environment and business conditions in general, including inflation and/or recessionary conditions; the ability of our suppliers to meet their commitments to us; the timing of purchases, migrations, or expansions by our current and potential customers; the rapidly changing and intensely competitive nature of the information technology industry, the data analytics business, and artificial intelligence capabilities; fluctuations in our operating, capital allocation, and cash flow results; our ability to execute and realize the anticipated benefits of our refreshed brand, business transformation program or restructuring and cost saving initiatives, including the 2024 restructuring actions noted in this release; risks inherent in operating in foreign countries, including sanctions, foreign currency fluctuations, and/or acts of war; risks associated with data privacy, cyberattacks and maintaining secure and effective products for our customers, as well as, internal information technology and control systems; the timely and successful development, production or acquisition, availability and/or market acceptance of new and existing products, product features and services, including for artificial intelligence; tax rates; turnover of our workforce and the ability to attract and retain skilled employees; protecting our intellectual property; availability and successful execution of new alliance and acquisition opportunities; subscription arrangements that may be cancelled or fail to be renewed; the impact on our business and financial reporting from the implementation of a new ERP system and changes in accounting rules; and other factors described from time to time in Teradata’s filings with the U.S. Securities and Exchange Commission, including its most recent annual report on Form 10-K, and subsequent quarterly reports on Forms 10-Q or current reports on Forms 8-K, as well as Teradata’s annual report to stockholders. Teradata does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About Teradata

At Teradata, we believe that people thrive when empowered with trusted information. We offer the most complete cloud analytics and data platform for AI. By delivering harmonized data and trusted AI, we enable more confident decision-making, unlock faster innovation, and drive the impactful business results organizations need most. See how at Teradata.com.

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